Professional Indemnity Insurance
Professional Indemnity Insurance
Often referred to as PII, Professional Indemnity Insurance, protects business owners if a client or third party has suffered loss or damage because of negligent services or advice provided.
A claim can be brought against you even if you provided the service or offered advice for free. PII covers both you and your employees against claims, so many businesses across a range of sectors take out a PII policy in addition to the standard Public and Employers’ Liability. PII is also a tax-deductible allowance expense.
What does PII Insurance cover?
PII covers costs that are the business’s responsibility if a claim arises, including legal fees, expenses, compensation, and any other cost that arises for the defense. PII cover is offered on a claims-made basis, which means insurers will only cover you if claims are made during the term of your policy.
Many brokers will advise you to take out a run-off policy when you retire in case a claim arises after you have stopped working.
Claims that are covered include:
- Breach of confidentiality
- Defamation
- Breach of copyright
- Loss of documents
- Bodily injury (breach of professional duty)
- Dishonesty of employees
- Negligent misstatement of misrepresentation
It does not include claims caused by computer viruses, so you might need to consider taking out a Cyber insurance policy if you store any form of information on a system.
Do I need Professional Indemnity Insurance?
If you offer your knowledge, skills, and advice or handle people’s information and intellectual property, you should strongly consider taking out Professional Indemnity, even if you are self-employed. Some professions are required to have PII by their professional bodies or regulators, which include:
- Solicitors (England and Wales)
- Accountants and Financial Advisors
- Architects
- Chartered Surveyors
- Some healthcare professionals
Some clients may not work with you if you do not have PII, regardless of sector.
How much does Professional Indemnity Insurance cost?
Like many policies, the cost of a Professional Indemnity policy varies widely. They cover anything between £2 – 5 million, with how much you take out depending on a variety of factors such as:
- The type of work you do and the clients you work with
- Projects you are working on or with
- Size of business
- Financial impact a mistake on your part would have
- Type of risks you face.
- Whether you provide consultancy or advice
It is important to be honest with your broker, as incorrect cover could lead to catastrophic financial loss.
Why choose Konsileo for Professional Indemnity Insurance?
Our Brokers have years of experience dealing with a wide variety of businesses and their unique Indemnity needs. Our access to a multitude of markets and products means that we can tailor policies for each individual business, regardless of size or sector.
Frequently Asked Questions
Professional Indemnity Insurance is not legally required for most businesses, but certain professions and regulatory bodies mandate minimum levels of cover.
Yes. Sole traders can be personally liable for claims arising from professional negligence, making Professional Indemnity Insurance particularly important
Run-Off Cover protects professionals against claims made after they have retired, ceased trading or sold their business.
Typically no. Cyber risks are usually covered under a dedicated Cyber Insurance policy.
Professional Indemnity Insurance covers claims arising from advice, services or professional mistakes. Public Liability Insurance covers injury or property damage claims made by third parties.